How to get 80% of deals over the line –
Adam Reeves our CFO and Principal Accountant at Blade Bookkeeping I’m not entirely sure why … but I see deals and opportunities everywhere. However not all good deals get over the line and there some common reasons for that … and they’re not rocket science to overcome. For a deal to have a reasonable chance of success … you need 2 key ingredients … in the form of 2 questions that I ask people to establish whether a deal has legs when they come to me excited about their idea …
Where is the money in it?
And what’s the security?
Most often these questions get met with a blank stare or a half arsed answer. I’ve even upset people with these questions. And that’s ok because they have potentially saved themselves thousands dollars and years of pain and mess by speaking to me first and they usually eventually work out that I’m on their side. You see if you want to attract investors with the money you need to address these 2 questions from the outset especially if your business is a start up with no proven track record yet. Without a track record … it’s just blue sky. Yes, it may have the potential of an amazing blue sky return … but without proven technology or business performance unfortunately your baby could be ugly. Before you stop breathing and judge me … just read on a little because there is a solution. In my experience to get a deal over the line is easy if you are willing to be realistic. I have to say this all the time that the bottom line of success in deal making is that it’s the person taking the risk that is the hero. Whoever is taking the risk needs to be compensated for that. Get that balance right … and I would say that you’ll get more than 80% of deals across the line. And don’t be greedy. It’s better to give away part of a profit than receive no profit at all. I know it can be hard if it’s your idea and intellectual property but without money behind it … it’s just that … an idea. Many great idea’s never make it to market. Don’t let this be you. I urge you not to take your deal to a prospective investor or sign anything until you speak to me … because you only get the chance at a first impression once. I get frustrated when good people with good ideas don’t make it or get treated badly. If you would like to chat about your idea simply email my manager of everything, Naomi, to set up a time to [email protected] Don’t find out the hard way.
Here’s what else is in the newsletter
- Why didn’t my accountant tell me that? Our ongoing series
- Are you a good leader in your business?
- What’s the REAL cost of coffee?
- Ever wondered how your business would go if you got sick
- Our usual Monthly Reminder – Super is Due!!
Plus our team recipe of the month (well most of the team!)
Here’s Article 2 …
“YOU COULD LOSE YOUR HOUSE!”
We’ve been inspired to create a series of answers to that question after a number of new clients have asked the same thing. This one applies to how a business structure is set up. If you’re a sole trader or have a job and a business on the side … you need to listen. Let’s say you are in the business of renting out equipment. Let’s say someone cuts their hand off using your equipment and they can prove negligence so they sue. If your house is in your own name and you trade in your own name … then you’re at risk of losing your house to pay out that person. This is especially bad if you have equity in your house as lawyers will look at this to see if you’re worth chasing. They DEFINITELY do a cost/benefit analysis on you. You need to be set up to protect yourself as best you can and there are ways to do this. We always suggest to seek advice before it’s too late as it’s always better to be safe than sorry … and far better to feel at ease. It can be too late is when there is a problem on the horizon already so act now! If you’re not sure then give us a call … and don’t forget that as a client you get access to our Dial-Before-You-Buy service. If you’re not a client you can book in a Strategy Call at www.yoursidekick.com.au or call 03 9889 5566.
Here’s article 3 …
There’s a saying that a business rots from the head down. Whether you know it or not … if you’re running a business … you’re a leader. Before my life as CEO at Blade Bookkeeping … I was a leader of a different kind. As a Captain of a jet with Virgin Australia, to get the aircraft off the ground and safety back … I had to lead a number of teams. Ground staff, engineers, cabin crew, operations and the flight department. On top of that keeping the passengers informed and at ease. That’s what they’re paying for and deserve. A great thing about aviation is the training you receive. You always have a chance to improve in any area because you are regularly checked to ensure you’re at a good standard. In business … you’re responsible for many teams … but you don’t always get the training to ensure that your team and your clients get the great service they deserve. So, here’s a few tips from my training and experience that I’ve adapted for business leaders. 1. You have to be able to change your style You need to accept that. Sorry. You see to get the best out of your people, you need to be an adaptable leader. What one employee responds to may not necessarily work for another AND it can change depending on what’s going on for them on any given day. For example, if you have an independent worker you can be a more distant leader if they’ve earned and proven they can work alone. Whereas someone who is new needs more hands on leadership. How you lead someone answering the phones will be different to how you lead someone handling the money in your business. To add to that, you are working with human beings who are big bags of emotions (even big tough boys!) so you need to understand the personality that you’re working with. An independent worker would get bored and disengaged if you tried to lead them by hovering as a helicopter leader and the new employee can’t be left alone. The measure of how your going is to observe the productivity and confidence of your staff. 2. Admit your mistakes and accept theirs It takes the bigger person to admit mistakes. It doesn’t make you less it actually gives you more respect. It actually makes you a more authentic leader and easily to follow. In my experience more respect is earned by being real. The other advantage is that it allows your team to feel more open to tell you about their mistakes. As a leader you’re far better off knowing what the mistake is immediately than finding out later when it’s gone from a molehill to a mountain. In fact, if a mistake is reported earlier it sometimes means that it’s often solved in seconds rather than weeks with an associated cost. If your employees feel secure enough to know how you will react it also turns the mistake into a learning opportunity and in the long run saves you money. 3. Give credit where credit is due I was always surprised how many co-pilots reacted when I acknowledged that they had done a good job or made a good suggestion. Even aviation had room for improvement in the positive reinforcement area. It’s human nature to have a good feeling if you’re acknowledged. By learning what is good helps them learn in a positive way which in turn keeps them open to hearing constructive feedback and actually listen! It has to balance … if you only see their bad bits … they’ll live into that. By balancing with positive feedback you get a double opportunity to learn. Again, better for your bottom line if there is continual improvement. 4. Take responsibility This one can be a bit challenging for some leaders and it’s around blame. If you’re always blaming your staff for mess ups then you’re not taking responsibility. It can seem unfair that their mistakes come back to you … but hey that’s why you earn the big bucks! I’m really talking about repeated mistakes here as it means that there is a pattern happening that needs to be rectified. A system problem comes back to the leader to identify and work out a solution. The answer could well be inside your employees head so if you’ve done a good job in Step 2 and 3 above, they’ll be open to making suggestions. In summary … It’s not always easy being a leader and can be lonely sometimes. Keep in mind that the balance and reward comes from persevering and by always learning. That way you’ll eventually achieve the ultimate … when you see your team is confident and you can sit back and it almost runs without you!
Here’s article 4 …
We all know that a latte these days is around $4. Yes we know that 7-eleven have $1 coffee’s but for the purpose of comparing it’s more likely that you’ll buy a coffee from the closest place. Also you would have to factor down time driving around looking for a 7-eleven. A $4 coffee doesn’t seem that bad on its own … but have you ever wondered what that adds up to in a year? We might sound a bit boring, but we actually did a test to find out what it costs per cup if you have your coffees at home … and you’d be surprised at the results. PURCHASE FROM THE CAFÉ Assuming 2 coffees per day @ $4 for 365 days per year = $2920 for one person MAKE AT HOME or WORKPLACE WITH OWN MACHINE We bought our coffee machine for $700. A $20 1kg bag of coffee beans makes 120 cups of coffee = $0.17 per cup With 100mls of milk = $0.10 per cup
Total per cup at home = $0.27
So, in a year $197.10 compared to $2920!! Even if you factor in a new coffee machine each year you are WAY in front. In fact, at least $2000 in front. If you put that saving towards your home loan on your family home … your wealth will grow faster. Maybe you’re spending money without thinking? Imagine finding 10 things in your life or your business where you could save $2000 … And don’t forget that this saving is for one person only … if you and your partner both do this then that’s exponentially a better result for your home loan. That would be $20K of your home loan which has direct effect on interest savings and time to pay it off. There are also other wealth benefits to saving a dollar which is in a previous newsletter that is worth a read. Our March 17 Newsletter – Finding a Quick Dollar Where else in your business or in your personal spending might there be savings? Next month we are going to compare buying your lunch compared to taking it from home.
Here’s article 5 …
Imagine if you got bad news from a doctor. If it’s scary news … then nothing else suddenly matters apart from survival. But what about the continued operation of your business? Here’s a few must do’s 1. Get income protection and/or trauma insurance especially if you’re main bread winner If you’re wondering if insurance companies ever pay out … I (Naomi) can say from personal experience that they do. I had early detected breast cancer and was paid out a substantial sum from my trauma insurance. What this allowed me to do was to leave my job and run Blade Bookkeeping which I may not have had the courage to do previously. In business it can allow you to look after your family and spend time healing until you are back on your feet. Speak to us about the right way to pay for this as there is an option to pay for it from within your Self-Managed Super fund if you have one. 2. Review your Will at least ever 5 years or as circumstances change. We are surprised how many people forget to do this. If you don’t have a will then the government can decide what happens to your money. It could be that you’re remarried or re-partnered and there are step kids to consider. Also your assets will probably have changed. It has to reflect your wishes. Having your affairs in order may not stop bad things happening but at least if can provide comfort and financial support in a crisis. 3. SYSTEMIZE SYSTEMIZE SYSTEMIZE!!! We bang on about this quite a bit but it’s only because we care. If you’re everything to everyone then the business is at risk if you get sick. Who has access to your bank account to pay bills? Who has access to your Xero accounting software to allow other users in? Which prospects were you supposed to follow up? What did you promise clients? Can someone else pick up where you left off? We’ve needed to improve our own project management here in Blade Bookkeeping. With team working nationally we found that we needed a central operations so that it was transparent as to where we were at with onboarding and nurture of clients. We implemented a project management software called Asana. It took a little bit of getting used to but once we did it made us ‘sick-proof’ and ‘holiday proof’ When one team member was sick and when one was on holidays, the tasks were already set for priority tasks and upcoming tasks so that things still ran smoothly. Everyone knew what was expected of them … that’s the key. A good way to think about it is to imagine you’re replacing yourself. That way you’re always improving the processes as well as being confident in getting away on holidays. The best time to start thinking about making your business less dependent on you … is now. Especially if you plan to grow. Don’t grow and kill the business … grow and thrive. If you need help with getting started … speak to Naomi and she will be happy to talk about how we did it.
Here’s article 6 …
We want to make sure that we’re giving you the service that you deserve.
If we are … please tell us! If we aren’t … please tell us! This is your chance to create the Sidekick that you want to support your business. We mean it. Email [email protected] and help us shape a better business for you.
Here’s article 7 …
28th October – YOUR SUPER PAYMENTS ARE DUE!!!!!
Here’s the recipe!
Affectionately known to us as ‘Tradie Power Pellets’
We’re always looking for easy snacks that aren’t from a packet. These raw balls are super yummy, super healthy and super filling. This recipe is from www.taste.com.au and took about 20 minutes total in time to make but there are soaking steps so you can get other stuff done in between! And you don’t have to bake anything. Sometimes on the go we just throw a few in a bag and eat for breakfast in the car. Ingredients 12 Dates 1 cup almond meal ½ cup shredded coconut, plus extra for rolling 1/3 cup coconut oil 1/3 cup cacao powder 1 tablespoon chia seeds Method Step 1 Place dates in a medium bowl and cover with water. Stand for 1 hour. Drain and discard seeds. Step 2 Process dates, almond meal, shredded coconut oil, cacao powder and chia seeds until mixture comes together. Transfer to a bowl an dstand for 20 minutes for chia seeds to soften. Step 3 Roll level tablespoons of mixture into balls. Roll in coconut to coat. We often make a double batch and keep in fridge or freeze for later.
That’s a wrap … drop the mike!! We’re done for another month. If you’ve read this to the end we’ll let you in on a secret … Last month we offered you a free deal. But nobody took us up on the offer. Always look here … maybe next month there’ll be a surprise!! Cheers and have a great month Tradie’s!